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Price or Weather - Which Signal Should Livestock Producers Follow?

Description:Cattle producers are faced with the task of making herd management decisions in a dynamic setting. Profit-driven producers desire to make money but are often constrained in their decisions. Limited resources, physical and financial, as well as fluctuating cattle markets, influence management strategies and resulting outcomes. Producers grazing decisions are limited by access to land and overall forage production. Grazing season production is largely affected by spring and early summer precipitation leaving producers with limited forage in dry years. Cattle price cycles also impact producers herd management decisions. Retaining or purchasing breeding animals at high points in the price cycle increases the cost of production while selling large numbers of animals at low points in the cycle results in low per-animal revenues. It would be easier to manage a herd if years of poor forage production were aligned with good selling opportunities in the market or vice versa, but producers seldom face this combination of market and weather impacts.

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